An established presence in the top flight of British biography, Hilary Spurling is renowned for uncovering secrets. A pattern emerges in her major books: the subject claims or appears to have had an unexciting domestic or emotional life; Spurling get to work and finds quite the opposite. "I'm a good ferret," she says. "The families of my subjects may know secrets, but they don't realise what sort of animal it is they're putting down their trousers."

In this way, the novelist Ivy Compton-Burnett, about whom she wrote her first book, insisted: "I have had such an uneventful life that there is little information to give." On the contrary: Spurling's biography revealed an extraordinarily painful family history, and a self-transformation – a shutting of the door on trauma – that had a deep influence on her work.

Similarly, it was believed that any life of Paul Scott, author of The Jewel in the Crown, would be a stolid affair: the received wisdom was that "he was a writer who just lived in Hampstead with his wife and daughters and nothing ever happened to him". Spurling discovered secrets almost no one knew, and so potentially upsetting to the members of Scott's family that she agonised over how best to tell them.

The book for which she is most celebrated, her two-volume Whitbread prize-winning life of Matisse followed the same trajectory. Spurling remembers "the exact words of the leading British expert" on the painter when he was approached to give advice: "Tell her she's right there's never been a biography and if she wants to know the reason why, it's because his life would be too dull to write about." It was generally thought the warm, serene paintings reflected a calm personal history; Spurling found rather that it was the artist's psychological turbulence that made him seek out serenity in his work. "I backed my biographer's hunch against the art historical profession."

It is "the under levels" of lives that fascinate her: "Lives lived almost wholly in public can be compelling – politicians, generals – but they're not for me. I like a really intense inner life."

Her new book, Burying the Bones, an account of the American novelist Pearl Buck – which has come out to eulogistic reviews – is an exercise in uncovering of a different kind. Buck, raised in China, was the best-known voice on the country in the 1930s, and The Good Earth was a world bestseller. She was also a Nobel laureate, but because of her later output of "trashy" popular novels, has been "virtually forgotten. She has no place in feminist mythology, and her novels have been effectively eliminated from the American literary map."

When Spurling first mentioned she was writing the book, friends seemed perplexed or embarrassed. Yet with China's increasing dominance, Buck appears a more significant figure in the history of the 20th century, and ripe for rediscovery. Her novels were for years banned in China as insufficiently ideological, but now official attitudes have softened. In terms of international sales, she could prove a canny choice of subject indeed.

Born in 1940, Spurling spent the war years in Clifton, Bristol – a port city that was heavily bombed. "I loved the bangs and flashes," she says. "Children ran free, in packs and alone, in the streets and in the woods. And bombsites were wonderful playgrounds – ruined houses, façades ripped away. We spent hours digging in the hope of finding an unexploded bomb. Thinking about it now, it's a metaphor for the way I write biography: I spend a lot of my time digging, looking for treasure – something shocking, or certainly surprising."

If childhood was an adventure, her teenage years were a drag. She didn't like the Bristol of the 50s ("a very provincial town"), and Clifton High School was "hateful": "it signified to me the depths of boredom to which a human being can sink . . . We were educated merely to marry and I longed to get away." Her undergraduate years in Oxford, on the other hand, were "wonderful . . . We arrived looking like middle-aged women; by the end of the first term it was very different." The university "opened the door, like it did for my father" (a barrister).

She married in 1961, when she was still at Oxford; "then I went to London. We were on our uppers and planning to be writers." (They both succeeded: John Spurling is a playwright, critic and novelist.) Hilary got a job as a waitress in a "sleazy caff" off Tottenham Court Road. She earned £4 10s a week; the rent of their run-down flat was £4.

They moved to Ladbroke Grove; one good friend who lived nearby was JG Farrell. Thanks to another, Malcolm Rutherford, who worked at the Spectator, Spurling got the job of theatre critic on the magazine in 1964, a post she held until 1969. She was, she says, "the most dreadful, scathing, swingeing, destructive critic, a battleaxe". Her strong views led to notoriety at the end of the decade when Lindsay Anderson, joint artistic director of the Royal Court, tried to ban her from his theatre, having taken against one of her notices. Other reviewers, including Harold Hobson of the Sunday Times, pledged to stay away in solidarity, and eventually the ban was overturned.

Even before starting as a journalist, Spurling had saved hard to buy her first picture, by the St Ives artist, Paul Feier. These days, the walls of the Spurlings' house in North London display an impressive collection of paintings, etchings and drawings, including the work of her friends Bridget Riley and John Hubbard. Modern art was a crucial part of Spurling's experience of the 60s, a time when, for her, "the world exploded in light, space and colour", thanks not least to the influential "New Generation" shows staged at the Whitechapel gallery from 1964.

With Nigel Lawson at the helm, Spurling was, in 1966, also made the literary editor of the Spectator (Roy Strong was the art critic and Michael Nyman the music critic). One cause she pursued was magical realism (Gabriel García Márquez's One Hundred Years of Solitude was published in 1967), and Philip French remembers a memorable day with the Spurlings guiding Jorge Luis Borges around the London sites of his literary heroes.

The magazine also set her on the path to biography. When Giles Gordon, editorial director of Gollancz, took her out to lunch to go through the books on his list, Spurling berated him for the way in which his firm published Compton-Burnett, whose unconventional novels about the Edwardian gentry had been favourites of hers for years ("I just thought she was so funny, the writer of some of the best one-liners in the English language"). Not long after Compton-Burnett died, in 1969, Spurling took Olivia Gollancz out to lunch at (of course) the Ivy. "She ordered – I'll never forget – a plain omelette and a glass of water. And a salad with no dressing. And being rather nervous I had the same. It was a very penitential lunch, quite suitable in a way to Compton-Burnett."

Some months later, when she was told she could write the biography – the advance was £500 – Spurling was "so delighted" she "promptly resigned" from the Spectator ("oh what a relief . . . to think of all those curtains going up all over London and I didn't have to be in front of any of them"). But what she hadn't been told was that the commission had also been offered "to someone else at the same time . . . without either of us knowing". It was a kind of joke played by Compton-Burnett from the grave: her friends would meet one biographer for lunch and the other for tea.

Spurling prevailed, and the first volume of her biography was published in 1974. "Writing it was such a training for me in understanding families . . . Her novels are to do with power, and she just chose as her theatre a Victorian family. Her fiction is really about totalitarian societies – and Victorian families, where all the power resided with the father, were totalitarian. So her books are about the 20th century, with a kind of bite and pertinacity not many other writers have had. I'd put her in the same class as Kafka – she was a writer of 20th-century fables."

Ivy When Young was regarded as a stunning debut, and surprised even those friends of Compton-Burnett who had talked to Spurling: "We all thought we knew her, but it turned out we knew her only partially," says the playwright Julian Mitchell. The second volume wasn't published until 10 years later. In the intervening years, Spurling had three children and wrote A Handbook to Anthony Powell's Music of Time, a detailed guide and index to the 12-volume Dance – characters, places, books, paintings. Powell fans treasure her book, but she hated doing it: "I took an engine apart, as a mechanic does, and ended up with a pile of bits on the garage floor." The novelist, a close friend whom she had first met at a Spectator lunch, asked her to write it, and in trying to persuade her, remarked meaningfully: "It will give you great power." His comment reached her, she says, because (like Compton-Burnett), "his primary subject as a novelist is power – the ways it works and the ways it doesn't".

It was agreed long ago that Spurling would write the "official" biography of Powell, who died in 2000, and that's what she'll be working on for the forseeable future. Their friendship was based partly on a love of gossip (according to French, the Spurlings are "gregarious, very interested in social relationships and gradations – not that they are snobs"). Of the novelist, she says he "was a raconteur and loved to hear about London life. Of course, gossip is raised several notches when you're talking to a real master".

Spurling has long been a fixture of London literary society: her friends include Michael Holroyd and Antonia Fraser (Powell's neice). Over the years, she also continued to know and see many of the people she interviewed in the writing of her books (including Sonia Orwell, whose reputation as a cold-hearted money-grabber she strongly challenged in The Girl in the Fiction Department). From the evidence of his published journals, Powell seems to have been rather smitten with Spurling ("Hilary looking very pretty"; "Hilary to luncheon . . . as ever, in terrific form, immensely entertaining" and so on).

He also clearly admired her determination to make things happen: "Hilary Spurling rang . . . at her most forceful . . . one imagines Mrs Thatcher ringing one of her Cabinet." According to Holroyd, "she has the reputation of being quite fierce; I imagine some people are wary of her and that's a tribute in a way." Fraser describes her as "cool, which I mean as a term of praise . . . she does what she wants to do".

The journals offer glimpses of her family life (her house's drastic subsidence; the travails of their cat, Biggles, the "terror of Holloway"). Powell also confirms other accounts of her as a memorable cook and inspired present-giver: he reports her plan to mark the publication of Holroyd's book on George Bernard Shaw "by giving him Russian dolls painted by herself: Shaw inside whom Augustus John, inside whom Lytton Strachey, inside whom Hugh Kingsmill, representing Holroyd's biographies."

Spurling earned a wage reviewing books for the Observer and the Daily Telegraph. Her next big book, published in 1990, was Paul Scott, for which she followed in the novelist's footsteps to Tulsa, Oklahoma, and to India and Australia. She regards his Raj Quartet as an "extraordinarily vivid description of the end of empire, the cracking apart of India" and particularly good on the experience of women. There was no point in writing his life, she says, "unless I could find out what drove him". His friends knew he was an alcoholic, but didn't know why; Spurling found a homosexual past long concealed.

As a spin-off from the first volume of her Matisse biography (the two volumes took her 15 years to write), Spurling wrote La Grande Thérèse, the gripping tale of Thérèse Humbert, a major player in the Third Republic until her legendary wealth was exposed as a hoax (Matisse's mother-in-law was the Humbert housekeeper, and his family fell under suspicion – another secret to be kept). Thérèse was renowned for her millinery, and at readings of the book, Spurling took to wearing a tall, elegant hat with a spotted veil.

Burying the Bones, like other lives she has written, is in part an exploration of social and economic vulnerability. It is also another account of an individual's strategy for dealing with a traumatic past: Buck grew up as the daughter of missionaries in Zhenjiang, and the book's title refers to her finding the remains of unwanted baby girls. She lived close to slavery, starvation, and cruelty to women, and Spurling asks what else she buried along with the bones. "I don't claim she's a great writer . . . she had a powerful imagination, but not primarily a literary one." But without question, she had an "intense inner life".

The book doesn't attempt to cover the second half of Buck's life, when she was a prominent public campaigner: Spurling, having added to the lustre of the "golden age" of British biography, which began in the late 1960s with Holroyd's life of Strachey, argues that "what we need now is a shorter, tighter, more sharply focused form, that concentrates on inner meaning rather than its outer chronological and documentary casing."

With the frenzy of publication over, the Spurlings are free to spend time in the Greek mountain village, wonderfully named Arcadia, where they have a house. Theirs is, according to Richard Cohen, Hilary's long-time publisher, a "good, generous marriage". "Each of us reads what the other writes," she says, "which may not make for a friction-free life, but is a good thing." (Cohen compares Spurling rather dauntingly to Dorothea in Middlemarch, of whom it is said that she is "altogether ardent, theoretic and intellectually consequent".)

Listening to her talk about Powell, it's already possible to envisage yet more reviews praising her elegant prose and indefatigable research. She is excited about one aspect in particular – the remarkable collage which covers the walls of the basement in the Chantry, Powell's small country house near Frome, Somerset. Spurling never went down there when Powell was alive, because it was the gents' lavatory.

As relaxation from writing the Dance, "he used to cut pictures out . . . virtually all of them are of people. He papered the walls with images, like a great tide of the sea coming in and covering everything. The walls are not organised or structured in a way the novels are structured, but nevertheless patterns emerge, as they emerge from the sea or sand – but not conscious patterns."

On the surface, Powell lived an "unobtrusive" life, but the collage is a perfect invitation to delve beneath that surface – literally, to a hidden "under level". "I imagine I'll spend a lot of time down there," she says.